Month: September 2024

A partnership is a reasonably straightforward way for two or more legal persons to establish and operate a business with the intent to make a profit. Partnerships can take various forms, and legal entities other than individuals can also be partners.

There are two main types of partnerships: the traditional partnership, involving two or more partners, and the more complex limited liability partnership (LLP), which offers the benefit of limited liability, similar to that of a company.

HMRC’s guidance clarifies that a partnership can exist without a written agreement, with a later written agreement simply formalising an existing oral agreement. In such cases, the partnership's formation date is when the terms of the oral agreement were first implemented. However, if a written agreement establishes a new partnership, where none previously existed, it is only effective from the date it is executed and implemented, with no retrospective effect.

HMRC's internal guidance for determining the existence of a partnership advises its officers that… it is important that you establish all of the facts to determine the true relationship between the parties. This will include finding out what the intentions of the parties were. No single factor is likely to be conclusive on its own. You will need to form an overall view, based on all the facts and evidence.

PSC stands for Person with Significant Control. It is a legal term used primarily in the United Kingdom under company law. A PSC is someone who holds significant influence or control over a company. Companies in the UK are required to identify and register their PSCs with Companies House to ensure transparency about who owns and controls companies.

A person can be classified as a PSC if they meet one or more of the following criteria:

1. Holding more than 25% of shares in the company.
2. Holding more than 25% of voting rights in the company.
3. Having the right to appoint or remove the majority of the board of directors.
4. Exercising significant influence or control over the company.
5. Having control over a trust or firm that meets any of the above conditions.

This register of PSCs helps combat issues like money laundering and tax evasion, ensuring there is transparency in company ownership and control.

PSC Register Requirements

Every UK company (unless exempt) is required to maintain a PSC Register and submit it to Companies House. This register must be kept up-to-date and include information on all PSCs. The process ensures transparency in company ownership and helps regulators, and the public, understand who controls UK companies.

Information Required for the PSC Register

For each person or legal entity classified as a PSC, the following details must be recorded:

1. Full name
2. Date of birth
3. Nationality
4. Country of residence
5. Service address (this can be different from their residential address)
6. Residential address (this is not made public)
7. The date they became a PSC
8. Which of the PSC conditions they meet (e.g., holding over 25% of shares)
9. Details of any significant influence or control they have over the company